Ripple price reiterates back to $0.9 after getting struck with a lawsuit claiming Ripple sold unregistered securities that were created out of thin air, unlike Bitcoin and Ethereum.
Ripple price yet again on $0.9 threshold as a class-action lawsuit strikes
The world’s third-largest cryptocurrency Ripple that yesterday was registering gains by climbing to $0.91 and was expected to cross over the $1 value, seems to take a setback as it took a drop of 0.49 percent today. Currently, sitting at $0.9, even small amount of dips can affect Ripple adversely while Bitcoin and Ethereum climb above $9,800 and $800 price level respectively.
For the past few weeks, XRP has been struggling between the $0.8 and $0.9 value, unable to cross the threshold of $0.90 which yesterday looked like a possibility now have been pushed back to this range again.
This setback came in the light of Ripple Labs Inc., that controls Ripple getting struck with a lawsuit by an investor who claims that the company raised millions of dollars through the sale of unregistered XRP tokens.
The plaintiff Ryan Coffey sued the San-Francisco-based fintech startup for violating the states and federal rules. Now, he is soliciting damages along with a proclamation that Ripple Labs and its CEO Bradley Garlinghouse has sold unregistered securities.
According to the filing, Coffey purchased 650 XRP tokens at the beginning of January at the rate of $2.60 each. A few weeks later, he sold them at a loss of about $551.
“XRP should not be classified as a security” – Ripple spokesman
The class-action lawsuit filed on Thursday in the Superior Court of California talks about the creation of billions of coins out of thin air claiming: “Unlike cryptocurrencies such as Bitcoin and Ethereum, which are mined by those validating transactions on their networks, all 100 billion of the XRP in existence were created out of thin air by Ripple Labs at its inception in 2013.”
The filing further states: “XRP is a security. Defendants themselves have recognized that XRP investors have a reasonable expectation of profit, and publicly touted XRP’s price performance on numerous occasions.”
In response to this, the spokesman of Ripple, Tom Channick stated
“We’ve seen the lawyer’s tweet about a recently filed lawsuit but have not been served. Like any civil proceeding, we’ll assess the merit or lack of merit to the allegations at the appropriate time. Whether or not XRP is a security is for the SEC to decide. We continue to believe XRP should not be classified as a security.”
The US SEC stated last year that companies that raise money through digital assets sale have to follow the federal security laws. Though, there is nothing on the nature of XRP from the agency’s side as of yet.
Yesterday, Ripple gained a bull momentum with the newly added USDT support from Binance which was expected to hit the $1 barrier very soon. But now, XRP is yet again in red and on $0.90 value.
What do you think of the lawsuit? Do you think Ripple price will rise to $1 and out of the legal debate regarding its “security” nature? Share your thoughts with us!
I am an associate content producer for the news section of Coingape. I have previously worked as a freelancer for numerous sites and have covered a dynamic range of topics from sports, finance to economics and politics.